Northumberland County Council 2021-22 Budget Consultation

Overview

Northumberland County Council must set a balanced budget each financial year.

This year, the worldwide Covid pandemic has presented profound challenges for the whole local government sector.

Councils, including Northumberland, have been on the front line of responding to Covid, adapting quickly to keep vital services operating, supporting our schools to stay open throughout, whilst protecting the most vulnerable people in our communities.

Alongside this, we have continued to develop plans for economic recovery and progressed delivery of investment in the county’s infrastructure.

Our Council and indeed the wider local government family have stepped up responded to all the challenges of Covid, keeping our county services running and supporting businesses to keep going in difficult circumstances.

We always knew the financial context was going to be challenging in 2020-21 and moving ahead. And, this has only intensified as a result of Covid where we have experienced increased spending pressures alongside falling income. We have pushed Government hard to support residents, local services and businesses during this time and, of course, welcome the additional funding that has been provided by Government.

This additional support has not so far filled all of the funding gap created by Covid and we continue to make the case to Government for a funding settlement that recognises the significant pressures on our Council.

So, local government is operating in a period of significant financial uncertainty brought about by ongoing significant budget pressures (including in social care, special educational needs, and disability services), as well as other unfunded pressures.

Covid adds a further layer of complexity and uncertainty. That is why we, along with almost all councils, are pushing for additional Government funding in the one-year spending review which we expect to be announced at the end of the month.

Latest developments

On 25 November, the Chancellor announced a one year spending review which we need to consider as part of our budget savings. Whilst we need to wait for the Local Government Finance Settlement from Government to assess the detailed position for the Council, the main provision relating to local government funding are:

• Core Spending Power (CSP) for local government will increase by 4.5%, with most of the increase in spending power from greater “Council Tax flexibilities”.  The referendum threshold will remain at 1.99% but there will be further flexibility for the Adult Social Care precept of 3%. Revenue Support Grant will be increased in line with inflation.
• Additional grant for Adult and Children’s Social care (with confirmation that the £1bn social care grant in 2020-21 will be rolled forward).
• Funding for additional Covid-19 related expenditure pressures in 2021/22.
• A scheme to compensate councils for 75% of irrecoverable loss of council tax and business rates revenues in 2020-21 has been established.
• Sales, fees and charges compensation scheme will be extended into the first three months of 2021-22.
• New Homes Bonus (NHB) will continue for a “further year with no new legacy payments”.
• A further £1.7bn nationally for pothole repairs and for roads maintenance in 2021-22.
• The Government has revealed further details of its UK Shared Prosperity Fund, though any further details on funding and distribution will be outlined early next year.
• The Government also announced a ‘Levelling-Up Fund’, worth £4bn and packaged as part of a new National Infrastructure Strategy. The fund will allow for bids of up to £20m – which could be extended in certain projects.

What’s changed since the budget papers were published on 10 November? 

Our budget consultation will only focus on proposals for 2021, and not proposals for future years. 

In addition, following the Comprehensive Spending Review announcement on 25 November, local authorities were offered more flexibility around setting Council Tax. 

The Council fully recognises the hardship that Covid has brought to many people. 

Therefore, in Northumberland, we intend to use those flexibilities, and propose to only increase our Council Tax increase by 1.99%, and split the Adult Social Care Precept over two years – with an increase of 1.75% in 2021, and then 1.25% the following year. 

What are we consulting on?

The Council must set a balanced budget each financial year, but we have some tough decisions to make.

A savings requirement of £8.3 million has been identified as required to balance the budget for 2021-22.

Our savings proposals have been and will continue to be developed using the following principles:

• Setting a balanced budget whilst maintaining modest and sustainable increases in Council Tax.
• Investing to save; recognising that one-off resources can be used to generate future savings that will pay back the investment.
• Ensuring that service and financial planning is fully aligned with the Corporate Plan.
• Continuously reviewing services in order to keep reductions to front line services to a minimum.
• Maintaining the Council’s strong financial position so that it has sufficient reserves and balances to address any future risks and unforeseen events without jeopardising key services and delivery of outcomes.
• Maintaining a commercial focus and maximising income generation while at the same time managing risk.
• Ensuring the Council can demonstrate value for money in the delivery of its priorities.

You can view a copy of the draft proposed budget papers here.

Why we are consulting

The global Covid pandemic has presented profound challenges for us all this year. This is also true of the local government sector. Councils, including ours, have been on the front line of responding to Covid, adapting quickly to keep vital services operating, supporting our schools to stay open throughout, and protecting the most vulnerable people in our communities.  

Alongside this, we have continued to develop plans for economic recovery and progressed delivery of investment in the county’s infrastructure – from new schools to leisure centres and roads.  

We always knew the financial context was going to be challenging this year - as well as into the future - and this is where we’d like you to have your say.  

We’ve always prided ourselves as being a council that listens to its residents so that's why we’re opening up a discussion on our budget proposals and asking you for your views.  

It will be a genuine consultation on the challenges we face, and an opportunity for people to let us know how they’d prioritise the services we deliver.  

We’ll be gathering all this information together which will help us make some key decisions for the next financial year.